Global stocks, industrial metals gain as China inflation slows

Global stocks rose for a second day and industrial metals rallied as Chinese inflation slowed more than forecast, reducing pressure on policy makers to tighten credit. The yen rebounded after a three-day slump took it to the brink of 100 per dollar for the first time since 2009.

The MSCI All-Country World Index advanced 0.3% at 10:32 a.m. in New York. The Standard & Poor’s 500 Index rose 0.1% while Alcoa Inc. fluctuated after reporting first-quarter earnings yesterday. Ten-year U.S. Treasury yields lost one basis point to 1.73%. The S&P GSCI gauge of 24 commodities was little changed as gains in copper, lead and zinc were offset by losses in wheat and natural gas. Japan’s currency strengthened 0.3% to 99 per dollar. France’s 10-year bonds fell for the first time in six days.

China’s inflation eased more than forecast last month from a 10-month high as food-price gains ebbed. Federal Reserve Chairman Ben S. Bernanke said economic conditions were far from where he would like them to be. The Bank of Japan last week announced stimulus measures, prompting the yen’s decline. The gain in Treasuries came amid speculation the Bank of Japan’s plan to double its asset purchases may boost buying at today’s $32 billion auction of three-year U.S. notes.

“I think the market is still digesting the Bank of Japan announcement,” Anastasia Amoroso, a global market strategist at JPMorgan Funds, said in a phone interview. The unit manages about $400 billion. “The reaction has been very pronounced in Japan, but not so much in the U.S. or the rest of the world. More and more, investors have to be thinking about what this means in light of the search for yield.”

Market Movers

Commodity, technology and energy companies led the advance in eight of the 10 main industries in the MSCI All-Country World Index.

The S&P 500 yesterday added 0.6% after disappointing jobs data sent it to a 1% loss last week, its biggest drop of the year. Alcoa, the largest American aluminum producer, swung between gains and losses as first-quarter earnings exceeded analysts’ estimates while revenue trailed projections. The shares rallied 1.8% yesterday.

Income at S&P 500 companies probably fell 1.8% in the first three months of the year, the first year-over-year drop since 2009, analyst estimates compiled by Bloomberg show. Three straight years of profit growth helped propel the benchmark index up as much as 132% since 2009 to a record 1,570.25 on April 2.